Paytm Q4 results: Loss narrows, revenue declines 16% YoY; aims to increase high-margin financial services revenue

Paytm Q4 results: Paytm's parent firm, One 97 Communications, on Tuesday, May 6, reported a consolidated loss of ₹539.8 crore for the March quarter (Q4) of FY25 against a loss of ₹549.6 crore in the same quarter last year.

During the last quarter, the company saw exceptional costs amounting to ₹522 crore. Excluding these exceptional items, in Q4FY25, Paytm's loss was ₹23 crore, while excluding UPI incentive and exceptional items, the loss was ₹93 crore.

One 97 Communications said it has a one-time, non-cash acceleration of ESOP expense of ₹492 crore in Q4FY25, which will result in an equivalent lowering of ESOP expenses in future quarters.

Accordingly, starting from Q1FY26, ESOP costs will be substantially lower, with Q1FY26 ESOP costs estimated to be in the range of ₹75-100 crore as against ₹169 crore in Q4FY25, the company said.

The company also informed about an impairment of ₹30 crore due to investment in a certain associate/subsidiary.

Consolidated revenue from operations for the quarter under review dropped 15.7 per cent year-on-year (YoY), coming at ₹1,911.5 crore compared to ₹2,267.1 crore in Q4FY24.

"In Q4FY25, we achieved operating revenue of ₹1,911 crore, with an increase in revenues from the distribution of financial services and ₹70 crore of UPI incentive for FY25. Excluding the UPI incentive, revenue increased 1 per cent QoQ, despite the festive season surge in payments volume in the previous quarter," Paytm said.

The company's EBITDA for the quarter, before ESOP cost, came at ₹81 crore, which was 21 per cent down from ₹102 crore in the same quarter of the previous financial year. However, EBITDA Before ESOP improved by ₹121 crore QoQ.

The company's EBITDA margin for the quarter declined 30 bps YoY to 4 per cent.

"Payment processing margin, excluding UPI incentive, continues to be above three bps, in line with our guidance. UPI incentive revenue was lower this year on account of lower incentives from the government," Paytm said.

The company highlighted that its net payment margin, including the UPI incentive, was at ₹578 crore. Excluding the UPI incentive, the net payment margin was ₹508 crore, up 4 per cent QoQ.

Due to the seasonality benefit in Q3, payments services revenue (excluding UPI incentive) was down 3 per cent QoQ, whereas payment processing cost was lower 9 per cent QoQ, a reduction of ₹50 crore QoQ the company said.

The company's total expenses during the quarter declined nearly 20 per cent to ₹2,154.9 crore from ₹2,691.4 crore in the corresponding quarter of the previous financial year.

Paytm said its merchant subscriber base for devices has reached 1.24 crore as of March 2025, with an addition of 8 lakh quarter-on-quarter.

The road ahead

Paytm said it will continue to strengthen the merchant payment ecosystem with merchant payment innovations, including new devices and aggregation of various MDR-bearing payment instruments.

It will also continue to drive MTU growth by focusing on product innovation and disciplined investments in marketing.

The company said its technology-led merchant payments and financial services distribution business model has the potential for expansion in international markets.

"For additional long-term growth, we are exploring opportunities in select international geographies, which will start showing results after three years," Paytm said.

While Paytm's financial services revenue increased to ₹545 crore, up 9 per cent QoQ, the company said it plans to increase high-margin financial services revenue by expanding financial services partners and products. 

Paytm share price closed 5.90 per cent lower at ₹815.30 on the BSE on May 6.

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